Federal Government Allocates N7.76 Trillion For Salaries, Other Expenditures

The Federal Government’s recently agreed wage with the Labour Union, salaries to federal workers, and other non-debt recurrent costs are expected to gulp N7.76tn in 2023.

The Publisher reported that this financial allocation is derived from both the initial 2023 budget and the supplementary budget signed recently. The central government has approved an N2.18 trillion budget to address new expenses, notably the agreed-upon wage increase for workers following the removal of the fuel subsidy.

Upon the budget announcement, the Minister of Budget and Economic Planning, Abubakar Bagudu, highlighted that N605 billion is designated for national defence, and an additional N210 billion will be utilized to disburse wage rewards.

He said, “N605bn for national defence and security is to sustain the gains made in security. It will accelerate the gains in that sector as the funds will be made available to security agencies before the year runs out.

“Equally a sum of N300bn was provided to repair bridges, including Eko and Third Mainland bridges, as well as construction, rehabilitation, and maintenance of many roads nationwide before the return of the rainy season.

“The sum of N210bn was provided for the payment of wage Awards. In negotiation with the Nigeria Labour Congress, the federal government agreed to pay N35,000 each to about 1.5 million employees of the Federal Government and that covers September, October, November, and December 2023.”

As per information provided by the budget office, the total budget allocates N1.01 trillion for recurrent expenditure and N1.17 trillion for capital expenditure. The supplementary budget aims to raise the Federal Government’s non-debt recurrent expenditure to N7.76 trillion and capital expenditure to N4.53 trillion.

This additional budget will also elevate the overall 2023 budget to N19.81 trillion. Excluding debt servicing, the budget amounts to N13.26 trillion. Of the N7.76 trillion allocated for recurrent expenditure, a significant portion, at least N4.31 trillion (55.54 percent), is earmarked for salaries. The government has already disbursed N978.10 billion on salaries in the first quarter of 2023, based on the 2023 Q1 implementation report.

In this period, N1.24 trillion has been allocated to non-debt recurrent expenditure, and N175.45 billion has been designated for capital expenditure.

To finance its budget, the government borrowed N2.30 trillion, and before approving the supplementary budget, it estimated a fiscal deficit of N9.01 trillion for the year.

The Federal Government recently expressed concerns about escalating expenditures amidst declining revenues. Oluwatoyin Madein, the Accountant General of the Federation, highlighted on Wednesday that revenue generation and collection are decreasing compared to government expenditure.

She said, “Inasmuch as the revenue is in this position, the expenditure too has yet also to be helping matters, especially with the current economic reality where the prices of things are going up regularly.

“The expenditure too is on the rise, and definitely, the strategies to increase revenue must be worked upon continuously to ensure that we have funds to meet the expectations of Nigerians.”

Nigeria’s revenue crisis is well documented due to falling oil production and the inability to diversify the economy effectively.

The former Minister of Finance, Budget, and National Planning, Zainab Ahmed, summarised it thus, “Revenue generation remains the major fiscal constraint of the federation.”